A Guide to Understanding Bitcoin and Cryptocurrency.
Although Bitcoin is one of the most searched terms (according to Google), it is a very technical topic for many people and can be too technical for non-geeks. However, there are now hundreds of cryptocurrencies and more and more people are starting to want to know how they work, possibly due to bankers being distrustful, which is a whole other discussion.
It’s hard to get a layman’s explanation without using technical terms like “private keys,” “digital keys,” “digital wallet,” and “cryptocurrency,” so I’ll do my best to make things as simple as possible. may be.
The concept of fiat money, i.e. paper currency, was created to make it easier for people to exchange goods or services to replace barter, as this would be limited at best to an exchange between two willing parties, while money allows you to provide your service or good and then buy it. the service or product you request from another person or others.
Therefore, I would argue that Bitcoin is the 21st century equivalent of bartering because it works as an exchange of goods or services directly between two willing parties. The exchange had to be based on every promise and trust to secure and deliver the promised good or service.
With Bitcoin or any other cryptocurrency today, each party needs a unique file or a unique key to exchange an agreed upon value between them.
Having a unique key or file makes it easier to keep track of each transaction. However, this too has problems.
Now, an exchange is a simple exchange of skills or goods, as I said earlier, the modern equivalent or Bitcoin is susceptible to security breaches ie file theft or hacking, this is where a “cryptocurrency wallet” comes into the equation to secure. your transactions.
Basically, you need a safe place to buy and store your cryptocurrency/bitcoin. Hence the need for a hardware wallet.
So now that you’ve written/recorded which amount of bitcoins are at which address and then it’s updated every time a transaction is made, the file is known as the “blockchain” and it keeps a record of all bitcoin transactions :
The next challenge is to keep our files unique.
I will deal with this in my next article.